If a Corporation Had Net Income of $60,000 and $20,000

question 162

True/False

If a corporation had net income of $60,000 and $20,000 in cash dividends were declared and paid then the retained earnings account would increase by $40,000.

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Definitions:

Internal Control

Mechanisms, rules, and procedures implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Normative Control

A management approach that seeks to regulate employees' behavior and decisions through the establishment of organizational norms and values.

Clan Control

A form of organizational management where control is exerted by promoting a strong culture, shared values, and traditions among its members.

Bureaucratic Control System

A formal system of organization that is based on clearly defined hierarchical levels and roles, with a focus on following fixed rules and procedures to manage operations.